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hrimhari writes "The settlement between Amazon and Macmillian got the attention of a known dinosaur. Consistent to his views, Mr. Murdoch wants to defend his book editors by killing the cheaper solution. '"We don't like the Amazon model of selling everything at $9.99," Murdoch said. "They pay us the wholesale price of $14 or whatever we charge," he said. "But I think it really devalues books, and it hurts all the retailers of the hardcover books.'"

Murdoch is not simply the old dinosaur; this is merely another case of one form of extremism (loads of cheap ebooks) begets another (kill ebooks).

Both models have their place, or in the words of Thomas Edison

"We will make electricity so cheap that only the rich will burn candles."

Personally, I can't wait to find a decent ebook reader - don't like what I have seen in the Sony ones available in Europe. Might go for the iPad instead. But on the other hand, I still want paper books - I find there is something very calming in holding and reading a paper book, on a medium where you neither have to worry about power (eventually) running out, nor do you have the temptation of quite as easily switching back and forth between different books,... It's more effort to change the (physical) book, and hence I find it more likely to actually stick to it. For work-related/reference books I want the ebook reader, for novels etc. I don't.But unlike Murdoch (or people wishing the end of paper books), I won't go for eliminating either form, as I can see the advantages of both.

Not mentioned that often in the context of ebooks - I remember reading a short story as part of my school English lessons, which seemed to predict 'ebooks' - and it was written in the 50s: Isaac Asimov's The Fun They Had ( http://users.aber.ac.uk/dgc/funtheyhad.html [aber.ac.uk] )

Both models have their place, or in the words of Thomas Edison
"We will make electricity so cheap that only the rich will burn candles."

You are mis-interpreting Edison - this statement does not at all represent the Murdoch model. If it did Edison would have said "We will make electricity so cheap that the candlemakers will have us banned". All Edison is saying is that if they can make electricity cheap enough then, given its inherent advantage over candles, why would anyone want to use them? He is not suggesting that anything be forced upon people like Murdoch is i.e. he is not saying that he wants to kill candles, just that most people will probably not want to use them in most cases because electricity will be so much cheaper.

This is exactly what I think will happen with books: nobody wants to set out to deliberately kill paper books but in the future I would imagine that only very popular "classic" books will end up in physical, high quality bindings and that the cheap paperback novels of today will be replaced by electronic media simply because eBooks are cheaper to make and more convenient.

I did not mean that Murdoch represents the Edison model - it's closer to the ebook model (ebooks cheaper, therefore only 'rich' will buy them on paper), i.e. the printed book is becoming the 'niche' product to read (just as candles are now almost a 'niche' product to provide lighting).

This is exactly what I think will happen with books: nobody wants to set out to deliberately kill paper books but in the future I would imagine that only very popular "classic" books will end up in physical, high quality bindings and that the cheap paperback novels of today will be replaced by electronic media simply because eBooks are cheaper to make and more convenient.

And it will revitalize the market for fiction by eliminating the compression of the midlist -- authors whose books sell consistently but not rapidly. Because e-books don't have to compete for physical rack space in stores against 'blockbusters' and have no inventory costs, e-books by authors can remain "in print" from their publication date until their copyright expires.

The same also applies for scholarly works, which generally have low print runs because of their slow sales and high inventory costs; e-book

The low prices are are designed to kill off the competition - much like MS offering better deals to OEMs who did not sell BeOS.

I agree ebooks should be cheaper than paper books, but how long do you think they will stay cheaper once Amazon has us all locked into Kindle? How long will you be able to buy books once you only read on a device that has DRM - pay per read or rent by the week is quite possible.

To make it worse, he has no excuse. The music industry does, they were the first to miss the boat on digital content. The movie industry should have caught on, but somehow didn't. The publishers should really have been able to figure it out; they had fair warning and opportunity and, seemingly, just couldn't connect the dots.

Big Content screwed up and is on the way out no matter how much they complain. Books are absolutely here to stay, but the profit model is shifting. Hopefully the huge economies of scale afforded by e-Books will allow the authors to profit more than under the current model. In any case, Amazon is sure to come out on top for the near future.

I say fine. The sooner all the publishers band together and collude with Steve Jobs to raise book prices and dictate the Retail price the sooner the DOJ can step in and smack them down for price fixing.

If the publishers want more money they could have just started rising price (regardless of the fact we are in the midst of a rather major depression). But to attempt to dictate retail prices by banding together is nothing but an assault on copyright law.

I notice no crocodile tears are shed by Murdoch for the authors, who are still stuck at 5 to 10% of revenue.

I say fine. The sooner all the publishers band together and collude with Steve Jobs to raise book prices and dictate the Retail price the sooner the DOJ can step in and smack them down for price fixing.

Where does Jobs fit into this? I mean, apart from conspiracy theories and what you reckon might happen.

And while I'm at it, the history of Apple's music sales is that they kept the prices down. The music industry wanted variable pricing, with new songs around $2.50 instead of $0.99.

Jobs fits in because he is now selling eBooks to iPad users at a price agreed with the publishers. While this may smack of "cartel", Amazon's no better -- selling books at a knock-down price to encourage people to buy the expensive Kindle, with the single-minded goal of gaining a monopoly on the market. Looking at the case of MacMillan, Amazon were selling at 66% of the RRP for the eBook. As I understand it, if this became standard pricing, the publishers and authors would end up with less money than for

It's hard to successfully nail IP industries for price fixing as copyright itself is price fixing and the products are not exactly fungible. Even when you nail them in the short term, monopoly pricing is set as a function of the consumers disposable income, not as a function of production cost and competition. Thus the prices will always tend to rise (in nominal terms, as reductions in disposable income will be hidden with inflation in the current economic system) and are unlikely to diverge far from each other (either lower or higher prices will result in lower revenue than the optimum monopoly pricing). You'll get the effect of price fixing whether they collude or not.

Basically the only way to affect pricing is to encourage large scale private copying and distribution of the products in question, which is pretty much what passes for 'competition' in that segment of the economy.

"Capitalism" as we know it was an industrial philosophy. It was devised in a time where value came from physical objects, because physical production was expensive. This was a time where a physical object had one purpose and one purpose only, and its value came from how well it fulfilled that purpose.

But look at the computer sitting in front of you. Chances are, you've spent more money on software than on the PC itself. The true value of a computing device comes from its configuration, because physically it is a general purpose device with the potential to do anything but the ability to do nothing. Software adds value to it.

No, this doesn't make sense in an industrialist-capitalist context. Something non-physical with value?

But consider AutoCAD, which costs three or four times the price of the PC it runs on. It took millions of man hours to create, and save millions of man hours every year for its users. If it sold at it's physical "value" it would be free. If it was free, Autodesk would go out of business and wouldn't write any more software. No materials or environments updates means no more AutoCAD. Which means people go back to pen and paper. Value is lost for everyone.

But going back to eBooks, there is still competition. Amazon UK has 451 books on "Ruby on Rails", for example. Copyright protection keeps prices high enough that a new entrant can afford to launch a book, while the reality of competition means that people are undercutting each other as much as they can afford to in order to get the needed market share. The market has reached equilibrium, and these books add genuine value by costing the same as about 3 man-hours of programming time, but being the product of thousands of man-hours for authors, proofreaders, typesetters etc and saving the buyer lots of time. Value is created, and the creators of that value must be rewarded.

Basically the numbers of interest are the retailer (45%), printing (just 10%), and the wholesaler (10%). So it's fairly easy to see that online books can dump wholesaling and printing costs... but that's just 20%, or $6. Retailer costs can drop, but most retailers still need to make a profit, even selling ebooks (servers cost money).

Given the breakdown, I can see how a publisher might charge Amazon $15 for a first-run book, and how Amazon might decide to eat the $5 (for first run books) if it means gaining ebook market share and if it also encourages people to buy older books on which they DO make money. And sells the occasional Kindle.

And if you think Amazon would not decide to lose some money now in order to build up market share, then you're completely forgetting how Amazon became Amazon in the first place.

There's a small flaw in your logic here. Your getting confused by the percentage that each entity gets from each book and and the absolute money receive. The fallacy is that you sell the same number of books no matter what the price.
Assume that you reduce the cost of the book by 50% and sell twice as much. Now we're talking ebook rather than physical book the printing and wholesaler costs don't cost double when you 'produce' two books (as they're zero in your model.) So now we sell twice as many book

It's nice to be ripped off;)I always thought that Cisco should almost give you those books for free, to make more CCNAs so it would be a no-brainer for companies which hardware to buy as finding support would be easier. But in the real world...Anyway, all technical books are like that. MCSE from MSFT is 40 quid each.

To make it worse, he has no excuse. The music industry does, they were the first to miss the boat on digital content. The movie industry should have caught on, but somehow didn't. The publishers should really have been able to figure it out; they had fair warning and opportunity and, seemingly, just couldn't connect the dots.

Big Content screwed up and is on the way out no matter how much they complain. Books are absolutely here to stay, but the profit model is shifting. Hopefully the huge economies of scale afforded by e-Books will allow the authors to profit more than under the current model. In any case, Amazon is sure to come out on top for the near future.

I don't quite agree with the analogy with music. People were downloading music files en masse and the recording industry was still refusing to budge their business model from the good ol' CD days. We had ipods in Australia before we had any real ability to buy music online (legally). With books, the situation is different - how many people download books compared with how many people buy them? This is not consumer-driven - it is a reaction of the publishers who can see the writing on the wall with the ever-

Stephen King tried this. And it didn't work. Because he didn't get enough money at the end of each chapter, he stopped writing the story. Thereby screwing every single one of his fans who DID pay up, because they paid for an incomplete story.

Now, if a best selling author like King couldn't make this model work, what makes you think it's viable?

It was AFTER he broke all records by writing the ebook "Riding the Bullet", so I don't think you can say there was no demand or that the lack of e-readers was a barrier to success.

The difference was, Riding the Bullet was complete, and relatively cheap. And it made King a TON of money.The Plant was done chapter by chapter. Even when the fans had a 75% or better payment, he increased the price and the audience disappeared. Then he stopped updating the tale.

What's to figure out? Either they completely re-invent themselves as digital media publishers and let every other old-school media company fight to bury/sue/discredit or otherwise marginalize them/their business (naturally, while picking their bones and pulling off anything remaining of value) or they themselves join in the frenzy to bury/sue/discredit or otherwise marginalize anyone else who dares to embrace the only actually viable media publishing option available to big business.

To those who modded this Flamebait: Ten media conglomerates control over 75% of the media in the U.S.A., and over 50% of the media in the world. But Fox "News" viewers are some of the worst-informed Americans. [people-press.org] Who do we blame but the CEO? And why would we believe different standards would apply to any other media under his control?

As an aside, I was asked to download comment.pl the first time I clicked reply. Then I got a reset connection. Finally, I got a reply form. Coincidence?:)

The Fox News claim is commonly repeated and is misleading in a broader context. The same study showed that by its measure people who get their news from blogs are statistically indistinguishable from Fox News viewers at how informed they are. Indeed, both Fox viewers and blog readers are very close to the average level for people in the US. If you look at the data what is actually really bringing the average down seems to be the people who either have no regular news source or who are getting their news primarily from local TV news. There are other details about that study that make the claim about Fox News not nearly as bad when you look at in context. And now the plug:For a more detailed analysis see my blog entry on this subject: http://religionsetspolitics.blogspot.com/2009/06/bloggers-fox-news-and-informed-audience.html [blogspot.com]. Fox News is wretched and is damaging America in many ways. But it is very hard to see this study as evidence for that fact.

The study shows that people who get most of their news from Fox News are about as poorly informed as people who get their news from blogs and you don't see that as devastating indictment of Fox New?

Blogs are almost by definition sources of opinion, not news. There is a big difference between the two. If they called it "Fox Televised Blogs" or "Fox Biased Opinions" then I would feel that they were being fair (in their title) but unbalanced. What is most irksome is that they are calling it news when it is actually opinions and propaganda.

I don't see how the context you provide makes it "not nearly as bad". The bottom of the pile is people who get no (non-local) news at all. The next rung up is people who get one-sided versions from blogs and Fox News and then above that is people who get their news from quasi-legitimate news sources.

At least Fox is rather blatant about being totally corporate controlled. The other so-called news sources, NYT, CBS, CNN, MSNBC, etc. are also corporate controlled but they are just a bit more subtle about it. I haven't looked at the study but I don't consider anyone who gets their news solely from American mainstream media to be well informed.

I think I may be able to explain the discrepancy between the sexes; the government is beaming propaganda about world events via the mind control beams. Men will, of course, raise their tinfoil hats when meeting a lady.

And yet, those who watched the O'Reilly Factor were broadly comparable (51% vs 54% max of any show) in percent of viewers who scored "high", and did better than NPR listeners (mid vs low categories). The show with the greatest percentage of "low" scorers was... the Jim Lehrer NewsHour. The lowest scorer among "high knowledge" was... network news. In fact, O'Reilly's viewers had the smallest percentage with a "low" knowledge of any source whatsoever.

In other words, news junkies are better informed about various political hot topics (because that's what the survey measured) than people who don't give a damn, and the show that they watch is pretty much irrelevant. If you don't like Fox's opinionists, watch CNN. And vice versa. Odds are, you'll be just as well informed.

If a new product comes along that is cheaper and more desired by consumers the old product becomes a dead market? What fascinating insight! How can I pay money to see more news from this "Murdoch" guy?

Given that Murdoch is a conservative, you would have to believe the "consistent with his views" is a sarcasm. Why would he think his products are exempt from market demand? Live by the free market, die by the free market. Or at least adapt to the market.

Surprised they own Gamespy and Hulu. Then again, Gamespy is garbage now since they changed up their site (as if they were somehow awesome before though) so I wouldn't care one way or another but Hulu is actually a pretty good site IMO.

Amazon's pricing is kind of weird. If I were the kind of person that HAD to have books when they first came out I might be tempted to buy a $9.99-$14.99 ebook rather than a $25.00-$30.00 hardcover. On the other hand, I'm quite likely to pick up the hardcover anyway - those things only sell because they're basically collectors editions.

The older books priced at around $2.50 look great. Those seem to be priced just right, although the public domain classics really should be $0.99.

Then there's the weird class of Kindle books that Amazon seems to be pricing around $8.39 (CAN). In most cases they seemed to be more expensive than the equivalent paperback, as Amazon's helpful price comparison pointed out.

There's no way I'm paying more than 50% of the price of a paperback for an e-book, and that fraction goes down the older that book gets.

You don't own the book, you can't sell it, you can't loan it and you can't donate it to a library. The paperback edition will eventually cost less than the 9.99 to 14.99 that Macmillan wants to charge. They need to enter the real world where you can go to a used bookstore a couple of months after a book is published and get it for less than their ebook prices.

Publishers have a firm grasp on the real world*. What they're hoping is that you won't be bothered to go to the used bookstore to get that book. Or even when it is convenient (like Amazon Marketplace), you are too impatient to wait. So far, the sales figures seem to bear this out. Convenience wins.

In music, of course, this revolution has come and gone, but-- I don't like downloading MP3s. I buy CDs, a good chunk of those used, either online or at the place down the street. I think of this as an 'automatic backup' of sorts. My friends, particularly the ones still in their 20's, think I am insane. "But dood, yo can get itoonz in like one click!" they say. Those are the people who will probably buy an e-book. They can buy it while they're on a bus or something. Very convenient.

* In publishing, not only do the big publishers know exactly how their stuff is selling (like what is sold, what is returned, what is stolen, what enters the second-hand market...), but they buy information they don't have so they know what their competitors are doing, too (e.g., a company called Monument Information Resource sells this). But not just that... publishers also occasionally sample bookstores to get a third view of that data. And, of course, there's lots of fraternizing between companies because employees switch jobs all the time. Anyway... they know what's going on, even at the piracy end. They are very clued into this by now.

The paperback edition will eventually cost less than the 9.99 to 14.99 that Macmillan wants to charge.

Yes, and you'll quite likely find that the price Macmillan wants to charge will drop as the paperbacks come out.

It's simple economics. Those who want it the day it comes out are generally prepared to pay a price premium for the privilege. Over time, the price drops, and others come in (trade paperback, mass market paperback.) Me? I only buy Terry Pratchett in hardcover; everybody else has to wait until mass market paperback, for various reasons.

Remember that publishers don't just print the books. They also edit them, lay them out, and market them. There are costs involved in those. Yes, the marginal costs of an ebook are so close to zero as to be almost indistinguishable. But if you have $20,000 in sunk costs, you're losing money unless you can make that back - so if there's a market for (say) 10,000 copies of the book, you need to charge, on average, over $2 a copy just to break even (yes, over two dollars - because there's an opportunity cost in sinking the money into books; if it takes ten years to make back the $20,000, you've lost money, even though on paper you've broken even, because of that opportunity cost - typically charged by banks as interest.)

So I expect to see the publishers of books take full advantage of the inherent price flexibility of electronic books by pushing the prices up high to start, and gradually dropping them until they're selling for maybe a couple of bucks a pop... because that way, they'll make more money, which means they can publish more books for us to read.

and watch the guy with the kindle squint to read the same as a ebook, then bet on if his batteries will fail before the kindle dies due to overheating in the sun, or becomes unusable due to salt or sand damage?

ebooks are now at least usable, but the readers are still too expensive and fragile to replace books (so far...)

When the readers are much less fragile, and come down in price, then perhaps the book printing industry will contract, but if the publishers are smart they

Yes, eBooks DO devalue books - as they should. Books are just a very (very!) old medium.

What eBooks don't devalue is content, or at least they shouldn't. Up until now, the content has been tied to the medium in the publishing world. We've seen what happened when the two became decoupled with music and movies (and even video games, to some extent - at least for PC gaming), and it's about damn time that the same thing happens with the written word.

As for companies that sell hardcovers... well, sucks to be them. That's what happens when your business model is tied to a single medium.

Aren't they already hurting? Doesn't everyone just buy the paperback because they're so much cheaper? Does anyone actually buy a hardcover who doesn't specifically value a durable physical copy of a book for collection purposes? If I'm going to buy a hardcover over a paperback, I'm going to buy a hardcover over an eBook for my Kindle.

Otherwise, if ebooks are the more convenient and cheaper format, then yeah, they win. What's the big surprise? Oh noes, the sa

If hardcovers and paperbacks were released simultaneously, I expect many more people would flock to paperbacks. Take Harry Potter for example - if both versions had been available at one of those midnight releases, don't you think many people would have taken the cheaper route? They wanted it that night, and hardcover was the only option, so that's what they paid for.

I agree - if I'm going to buy a hardcover over a paperback, then I'd probably also get a hardcover over an ebook. But usually if I'm buying a

The problem with hardcovers in the US is the extortionist pricing (it's just paper and cardboard FFS) and the sometimes multi-year wait until softcover editions come out. Hop over to Canada and you will see much saner retail pricing in their bookstores. Books are much cheaper in Japan too and the paper, printing, and binding is WAY higher quality than what you can get in North American mass market publications. If hard cover book sales suffer in the US it's because we're tired of being raped and finally hav

Paper books will always live. One the one hand, there are still a billion people in the world without access to regular electricity. On the other, we might have limited resources in the future to make new electronic devices, due to peak oil and climate change. Yet, we can always make paper on a small, local scale if necessary. But electronic devices require a large industrial infrastructure.

After all, we have thousands of years of written human history, but only a tiny moment of digital history. It would be presumptuous of us to assume the latter will last longer than the former.

Uh we have thousands of years of bits and pieces of history -translated and adulterated as the editors saw fit. Thera nothing wrong with the written word but I would say we've recorded a million more times the history in the last decade than was recorded in all of history due to the digital revolution.

Disagree... paper's days are limited as a mass media medium. Sure we'll still have limited paper runs for certain "classics" and for official documents. But your general "Michael Crichton" book will no longer come in paper format. This is of course once we've figured out how to do the ebook properly.

Except the reality is that only a very few actually make an "obscene profit". The vast majority of books, films and music wither and die with very little revenue. For every Dan Brown or J.K. Rowling there are a thousand other writers who will never make even a part-time wage for their works.

Book publishing is an expensive business and e-books level the playing field considerably. The three biggest costs in book production are (not necessarily in this order):

1. Printing2. Marketing3. Distribution

A publisher needs to have confidence that a book will sell X copies at Y price in order to know that they will at least break even on publishing it. And I guarantee you that every publisher has a warehouse full of books they guessed wrong on and nobody bought. But those costs are sunk. They pay get pennies on the dollar at the paper recycler but otherwise they've blown a lot of cash printing books they never sold.

As on-demand, and now e-book, publishing has become more and more viable the break-even point has come WAY down and books that would never have seen the light of day are getting their chance.

And publishers should LOVE eBooks - it takes printing and distribution largely out of the equation and means far greater profits off a much lower price. I wouldn't mind if my publisher did Kindle versions of my books, that's just one more medium and a much higher net profit from the books.

I love books. I much prefer to read a dead-tree book than an e-book. There's just something I love about sitting on a couch with a book in my hands turning the pages as I read. It doesn't matter if it's a technical book, fiction, nonfiction, or a textbook of some sort. I prefer the actual thing. Looking at a screen trying to read an e-book just sucks in my opinion(admittedly I have yet to use the Nook or other such devices).

That said. I can't afford the dead-tree versions of alot of the books I want. So I have to resort to e-books. The people like Murdoch need to catch up with the times. Amazon makes it to where I can afford to read the books I love. As far as I'm concerned, they get my business because they tend to do things for the customers from what I've seen, not their wallets.

I have been in IT now for just on 20 years, I do everything electronically and my house is fully wired. But give me a paper based book over an e-book any day. I have tried a few of the e-book readers now and I can honestly say I hate them all utterly and completely. I read on average a novel every 2-3 weeks and I will happily pay more for dead-tree books simply for the better experience they provide.

As much as I like having shelves and shelves of books, I'm really paying for the data, not the storage. If an ebook is the cheapest, I buy it unless it is on a very short list of authors I like in hardback.

If, for some idiotic reason, the ebook costs more than cutting down a tree, pulping it, and printing words on the dried remains, then I buy the paperback and warez the ebook(or drop it in the hopper of the industrial scanner at work).

Looking at a screen trying to read an e-book just sucks in my opinion(admittedly I have yet to use the Nook or other such devices).

I'm with you, and still generally prefer dead trees, but e-ink has really changed the experience of reading digital documents. You're not staring at a screen. You're staring at a print-out. You can sit on the couch and read it. It's still doesn't have the charm of a real book, but everything that sucks about e-books is gone and the nice things (like digital bookmarks and ta

I love books. I much prefer to read a dead-tree book than an e-book. There's just something I love about sitting on a couch with a book in my hands turning the pages as I read.

That's funny. I prefer my Kindle for the exact same reason. There's just something I love about sitting on a recliner with my Kindle in my hands, turning the pages as I read, without having to worry about holding down the pages so that the pages don't close on me or damaging the spines of the books permanently by opening up the pages too much.

I'd rather very much focus on the book and its content, as I can with Kindle (or any ebook reader with reflective screen, really), not how I am struggling with its physical manifestation.

Try an e-Ink screen. It's great. You have to read a lot to make it worth your while to buy an e-Ink reader, but unless you're one of the few who can read LCD all day and all night without eyestrain, it's a real pleasure to use.

I sided with Macmillan in this little argument, because I think the way Amazon acted was really shitty and totally lacking in class. But when Rupert fucking Murdoch starts speaking out against Amazon, it almost makes me want to side with Amazon. Almost. I guess I can always just hate them both.

this is what happens when you let a handful of individuals own huge economic resources. they become like feudal lords, asserting their own will to majority of the people. here, behold, technology has improved, there is a possibility of cheaper goods being available to public. but, the feudal corporate structure doesnt want to let it happen. so much for 'free market', so much for 'invisible hand'. this is just in line with another observation i posted in a similar thread before:

e-readers have their place. I'd say it would be for viewing more dynamic docs or quick reference over a networked feed for tech docs. Paper books, for me, are not replaceable. You don't have to worry so much about a paperback. I can smack my son (allegedly) with it when he acts like a kook. I can throw it off a twenty story building and it still works. I can treat my book like the $6.00 price it cost.

I know this is an old argument. I am an old dude, (allegedly), but I see what my son reads. And how he reads, and he decidedly did not want an e-reader for his reading needs.

He forgets the golden rule of capitalism! I don't give a shit about the retailers. I want competitively priced goods. If I can get them from Amazon for cheap and in a format I'm happy with, well, bu-bye Murdock-with-your-head-up-your-ass. Good riddance. You are not entitled to a living, change.

This is a preemptive reply to the ten million people who are about to post variations on the following theme"e-books should only cost a few dollars because they don't have the cost of printing/shipping/storing a book"

This is wrong.

This is wrong because actually printing a book is the smallest cost involved in making one. When you look at the price of, say, a $35 hardcover book perhaps $4 is physical costs. Almost all of the cost of a book is the cost of paying the author/editor/proofreader plus the retail markup. These costs remain the same regardless of format.

And you will note that I have not mentioned publisher's profit. That's because there basically isn't one. Publishing is notorious for having no profit margin. Always has been. It was famous for not making money a century ago, famous for it fifty years ago and still a great way to get well known while losing money today. Publishing is not the music industry and it is not the movie industry. Almost all the profit is spent in up-front costs before the product even hits the streets.

Because of this, publishing has always had a very sane pricing policy. First they publish the hardcover for a high price point. Everyone who can't wait to read it buys it. Then if it is popular enough to pay off the costs six months or a year later they produce a softcover for $10 to pick up everyone who didn't want it enough to pay the hardcover costs.

Now, this doesn't mesh very well with the electronic music or video markets which is why Amazon tries to run with a fixed price point. But that's a nuts way of doing things when you are talking about books. Doesn't work because it doesn't pay off the fixed costs involved in paying the people who produce the books.

So, really, a fair e-book price is about $5 less than whatever it is selling for on the shelf. When a book first comes out that means $30-$40. A year or so later $6 is pretty likely. If you can't stand waiting don't bitch about the higher price.

MSRP may be $30-$40, but I've never seen an actual hardcover that was actually selling for that that wasn't giant book o' stunning pictures. Most of the time you get them for "40% off!!!" which brings new hardcovers into the 17-24 range.

Publishing is not the music industry and it is not the movie industry. Almost all the profit is spent in up-front costs before the product even hits the streets.

Got it, it's the movie industry. Unless those "up-front" costs are actually printing and storage costs. But that wouldn't jive well with your assertion that printing is a tiny fraction of the cost of bringing a book to market.

ok first off you are viewing publishing in the context of print books. The switch to eformats( it will happen) will change the upfront costs. secondly much of the cost of selling books retail involves shipping( huge costs) and markup for the retailer. Retailers have limited shelf space and high costs for labor, etc.They have to recoup those or fold. Ebooks will eventually be sold with a tiny markup by the retailer OR direct from the publisher.
The new market will eliminate shipping, retail space costs, most retail markup. More importantly it will eliminate printing books that do not sell. Many books do not sell. Printing a book may cost 5 bucks but if you print 3 for every one you sell WHOA thats 15 per book. Also the move to ebooks eliminates the vast amounts of capital publishing requires. This will allow publishers to publish many more books. Also by spending former production costs on marketing sell they can sell more copies also, to a point.
The question is WHY book publishers have not moved faster to ditch paper and trucks in favor of electrons and cables? I predict more books will come out ONLY on ebook soon and not just junkie fan fiction or how to manuals. Universities( and students) should be the first to insist on ebooks to curtail the insane price of text books. A sensible ebook lending policy could cause libraries to buy thousands more books( no need for a bigger building, or a library visit, or even to live in the same city) thus improving sales of some titles. Imagine a national lending library for ebooks funded by a small donation made at the point of purchase( click here to donate 1 dollar to put a copy of this book in the national library). The amount of good for the people(including the industry) that can come from this is HUGE. But it will hurt some existing profit models..so what.
For now I just pirate books on to my kindle at a ratio of around 10:1 to compensate for the gouging done by ebook retailers. For murdoch's company i guess i will raise that ratio to 15:1( or higher) now..no big deal...please join me in this act of revolution and make ebooks more common.

"....blah blah blah about why ebooks should be almost as expensive as real ones..."

Bullshit.

Double Bullshit, in fact.

See, the point you're overlooking is that the costs you mention are FLAT.What the author is paid for his intellectual and (very hard) work is a flat amount. Note, I of course recognize that this isn't true in the real world, most authors are paid a floating number - this make sense, as they are 'sharing' the profit over time, mainly so that the publishers can pay them less to start. They're

It sounds like your business isn't really what's being discussed. It sounds like you're in the non-fiction/textbook market, whereas most people are discussing paperback fiction. Stuff like illustration and research are likely to be much lower (or non-existant) in fiction.

Almost as common are books that bleed money and end up in a bulk recycler by the thousands

Part of the advantage of ebooks is that you avoid the wastage problem. Ebooks are always "on demand" - you never have to do a 10,000 run "on spec", only to sell 200 and ditch the rest.

How is this NOT price fixing? They use licensing semantics to do an end run around the idea, but in the end it's price fixing. Last I heard, anti competitive practices like that are illegal in the United States.

This was already a problem as a kid: Once i was ill my aunt gave me five books as a gift. The next morning i called her and asked for more. In a hindsight, this was really embarrassing.

But once i started earning good money, this problem has multiplied. I am running out of shelf space. With my marriage i gave away about 1.000 books to friends just to have a little space for my wifes books.

So started with ebooks as a measure of self defence. I started with the Iliad Irex about 3-4 years ago. Since then i purchased several hundred ebooks. The good thing is: i drive on vacation without any fear of running out of input.

Therefor i am very interested in everything that concerns costs of books.

I totally hate any kind of DRM. Since i started i went through several different reader. Any restriction to move a book with me feels like theft. This one reason my favorite publisher is Baen. They have the most honest approach towards the reader. I think Eric Flints Introducing the Baen Free Library [baen.com] gives the best summary on that topic ever written.

I also worked as author, editor and publisher for books (on a very small scale). Therefor i know how much money is in the production (very little) and distribution (a lot) process and how little ends up with the authors. So i think that ebooks will greatly improve the percentage an author will get from the book sales (but not the overall revenue).

Current contracts give authors a certain percentage of all revenue. So it is in the interest of publishers and authors to get the prices as high as possible. But while the publishers still get the same share, they do a lot less for the sale of an ebook than for one of a paperback.

So at this point customers are on the side of Amazon, that an ebook should cost significantly less than a paper based book.

Currently the frontlines run between Amazon and the customers on one side and publishers and authors on the other. But the authors are not on that side due to their own interest but due to the current publishing system. I don't think that this situation will remain static. The publishers are bound to loose the authors as allies and then the fight next.

A typical question is: It's the same book, why shpould the reader pay less for an eboook?

It is the same book but it is not the same service. With a paper based book, they have to print it, ship it through the world, provide shelf space in the bookstore, pay the cashier guy,...

The transport of an ebook is by a factor 1.000 cheaper than a paper book, the cashier is fully automated, it does not take shelf space,....

If the producer has less costs, the product should become cheaper.

Where i agree: The author provides the same service, so he/she should get the same amount as before.

Who works less is the publisher and the bookstore. They should get less for an ebook.

The problem is the typical contract between author and publisher. Usually there is a certain fix percentage of the revenue (no matter wether ebook or paper book) designated for the author. While the percantage of an author at a book is around 10-15%, it should be higher (e.g. 30%) for ebooks. Of course the publishers are not in favor....

Publishers dislike ebooks not just due to the prices. If ebooks become too popular, the need for publishers is decreasing. An author could go just directly to Amazon without the help of publisher. Currently an ebook will not sell very well if there is no paper book to create demand. But this will change. The publishers (like the RIAA before them) wants to fight it. But they will have as much success as fighting entropy....

Personally i am totally in favor of the development. The service i am interested in is someone like Pat writing fascinating novels. I am also willing to pay for the editor and the distribution. But i am not interested in trees getting chopped down and trucks blowing carbon dioxide into the air while carrying harcovers.

The Encyclopedia Britannica costs $70/a for an online subscription. It costs $1300 for a paper copy. People still buy the paper copy.

Not many. Britannica has been in trouble for years. When Microsoft did Encarta, they talked to Britannica about some kind of business arrangement. Britannica turned Microsoft down. Years later, with Britannica doing badly, they went to see Bill Gates, who told them that, because of their expensive sales force, their organization now had "negative value".

Value is based on the principal of scarcity. With print medium the publishers could control the scarcity, AND create the demand through marketing, thereby increasing the value i.e. the price. But when talking about profit margins, I will hazard a calculated guess and say that e-books are far more profitable even at the lower price point.
The real issue here is that Murdoch and other redundant publishers no longer get to control the scarcity in the market, plus with the lowered cost barriers to market entry, a LOT more fish are now feeding in the same pond.

1) If you want to charge me $15 for an ebook, I would like to get the ebook immediately, followed by the real printed book in snail mail. Don't care how long it takes to arrive, as long as it does.

2) If you want to charge me $15 for a paperback, I would like to be able to register online somehow and also download the ebook.

ie: the ebook costs practically fuck all to duplicate and distribute. Leverage that advantage and turn it into a bonus.

I will not pay $15 for an ebook, ever. Especially if it's festooned with DRM. I will wait until the paperback is out (of course, I'm in Australia, where we get royally fucked because of bullshit book distribution laws, so it'll be more like $22 for the paperback, but still).

Sure ebooks hurt the retail merchants but so what? Industries are not protected nor should they be. Buggy builders were slaughtered by the automobile. The telegraph industry was murdered by the telephone and computer industry. Telephone operators were blown out of work by electronic switchboards. Lawn workers were smacked down by gasoline mowers. The list is endless. So just why are we to be concerned about the loss of retail book sellers? Take a peek at movie theaters. In 1930 theaters were absolutely enormous. Today there is no such thing as a theater that seats 20,000. Soon even the small theaters that still exist will probably vanish as the television industry has better and better technology.

... it's that the basic point... eBooks are SUPPOSED to kill paper books. Or at least replace them, for those who use eBooks. Who will more every year, particularly once the proprietary formats fail and eBooks can be ready by every eBook reader.

As for Hardcover prices... well, there's a difference between the quality and longevity of a hardcover versus the paperback. That's the only true value of the hardcover book. The rest is marketing... the early release... like seeing a film in the theater now, or waiting for the DVD or Blu-Ray later... or the HBO presentation later still.

But that's not true of an eBook... there is virtually no cost of duplication, far cheaper to make than paperbacks. And more restricted, at least with DRM; you can't resell them, or lend them in any real way. You may not be able to annotate them, either. Thus, much less value than a paperback, in the same way that MP3 and AACs are of lower value -- the product itself, then a CD. Some value may be regained at the point-of-sale; they're sold in other ways: singles and impulse... I can buy a piece of a CD, and have it right now. That keeps the basic individual price relative high.. and yet, I've still managed to buy whole MP3 albums on Amazon for $2-$4 each. Which is about the right value, versus an $8-12 CD, or $15-$20 SACD or DVD-Audio Disc.

It's understandable that the publishers don't like this, in general. For one, they understand hardcovers and paperbacks, but can't quite get their heads wrapped around an eBook as being something different. They want it to be a hardcover, Amazon wants it to be a paperback, but delivered at about the same time as a hardcover. I think, in reality, this is a different form, and needs to be treated as such. For one, there are lots of publisher's expenses associated with a hardcover: printing fees, distribution, in-store kiosks, maybe shelving fees, etc. All of these, at the very least, should be subtracted from the retail price and the publisher's piece of the book sale. Otherwise, they're going to be using this as a trick to increase revenues, even though they're performing significantly less of a service.

And in fact, that's the real issue here. The book publishing industry has never been quite as abusive of "the talent" as the record industry, but they still want the bulk of profits if they can get it. If I buy a book, it still lists the author's copyright... most CDs will claim a copyright by the record company, despite their being just another kind of publisher. This has resulted in push-back by artists, some self-publishing, some going all digital or mostly digital. That works, particularly for established artists (Prince, Radiohead, Nine Inch Nails, etc). The rise of eBooks will enable this same route by writers. Maybe not for awhile.. the eBook reader is a relative new thing, but already at some level of acceptance due to the use of general purpose computers, just as the walkman and similar personal stereos laid the ground for an easy acceptance, then dominance, of the MP3 player/PMP.

I read a lot. What I want is the hardback/paperback to come with a free download of the eBook. I like to read the paper book when I can but it's a lot easier to carry a Kindle or iPad with me when I'm out of town, or just at the office, than half a dozen books. Also I like being able to search a book - it's especially handy for textbooks and tech books.
I have tens of thousands of books saved on my laptop. I tend to buy the paper edition of books I like but if the publishers make me feel like they are out

"Dead tree" is an attempt at humor while being clear what you are talking about. The vast majority of people using the phrase are not trying to make a moral judgment about killing trees. Having a separate term for different types of books is useful, especially as both become more common. This is the same way that we had just "mail" and then "voice mail" and "e-mail" came along. Other types of mail became common enough that we needed a way of talking about physical mail as a subclass, hence the phrase "snail mail." This has happened historically with many technologies. There are many historic examples. Sure, some people are making a moral judgment but that's a pretty tiny fraction of the people. And the moral judgment might not even be negative. Someone might even like killing trees.

Huh? Why do eBooks necessitate DRM in your mind? I've got plenty of eBooks that aren't restricted. And you suggest using PDFs instead. Why don't PDFs count as eBooks? Because they're in your preferred format? PDFs are absolutely useless to read unless you've got a device that will display the whole rendered with of the PDF legibly. Much more useful are formats that allow text re-flowing so you read them on mobile devices with smaller screen-widths.

If you're seen the e-ink based electronic book reader such as the Sony Reader, I have to disagree with you. With e-ink, the text is very sharp and readable, and the weight of the PRS-600 Sony Reader with touchscreen interface is around 10 ounces--lighter than many hardback novels nowadays. If you're going on a trip and plan to read a lot, lot easier to carry one PRS-600 than carrying a whole bunch of books.